Minimum wage could rise to £7 but unions demand more

George Osbornehas said the minimum wage may be raised (Picture: Getty)

The minimum wage may be raised as George Osborne insisted Britain could afford an above-inflation increase.

It could rise from £6.31-an-hour to £7 because the country’s economy is on the up, the chancellor said.

‘I think Britain can afford a higher minimum wage. I think we have worked hard to get to this point and we can start to enjoy the fruits of all that hard work,’ he told the BBC.

‘Because we are fixing the economy and working through our plan I believe Britain can afford an above-inflation increase in the minimum wage so we restore its real value for people and we make sure we have a recovery for all and that work always pays.’

His comments came after the Department for Business made its submission to the Low Pay Commission, which will soon produce its recommendations on the rise.

‘The exact figure has to be set by the Low Pay Commission, which talks to business and talks to other bodies in our economy,’ added Mr Osborne. ‘But, if for example, the minimum wage had kept pace with inflation it would be £7 by 2015/16.’

However, trade unions insisted it should rise more to match the ‘living wage’ which campaigners claim is the level required to meet basic needs.

The notional rate is set at £8.80 in London and £7.65 for the rest of the country.